Chikungunya affects Indian rubber prices

[sharon sanders]

Emerging diseases can affect prices of raw goods and futures markets.



Kolkata: The All India Rubber Industries Association (AIRIA), concerned over both volatility in the prices of natural rubber and inadequate domestic availability of natural rubber, has sought duty-free import of one lakh tonnes of natural rubber for domestic production of rubber goods, as �49,800 tonnes of natural rubber as imported under DEEC licence are meant for export production and have no relevance to domestic demand�. <!-- AdTag -->
According to M.F. Vohra, President of AIRIA, consumption of natural rubber outstripping its production, coupled with loss of production in the last few months, may lead to non-availability of natural rubber to the extent of one lakh tonnes. He felt this may lead to further spurt in prices.
Citing a recent study of the Rubber Research Institute of India, he said owing to Chikungunya affecting tappers and excessive Kerala rains making tapping difficult, some 50,000 tonnes of natural rubber was lost during the first five months of the current fiscal.
The Rubber Board, according to AIRIA, has estimated the growth in natural rubber production during 2007-08 at 3.6 per cent against a consumption growth of 4 per cent. In 2009, Vohra said, consumption was expected to grow by 4.8 per cent, while production growth is expected to remain at 3.6 per cent.
He said in order to overcome this problem, the rubber goods industry needs to depend on imports, which again become prohibitive with the 20 per cent import duty levied on natural rubber and 70 per cent on Rubber Latex. According to Mr Vohra, ever since futures trading in natural rubber commenced (since 2003-04), prices of the commodity have steadily gone up.
�While the rubber industry has no qualms about natural rubber prices being determined by market forces in an open market economy, the industry is averse to manipulation in prices as indulged in by a section of traders owing to natural rubber being included in the commodity list of futures trading.�
He said response to the representation for removal of natural rubber from the commodity list of futures trading was still awaited.

http://sify.com/finance/fullstory.php?id=14559552

 

[Sally Furniss]

Re: Chikungunya affects Indian rubber prices

India's rubber output seen above f'cast

NEW DELHI (Reuters) - India's output of rubber has picked up in the past two months after workers returned from a viral disease and should top 819,000 tonnes in the year to March, up 10 percent from earlier forecasts, a government source said.

Output was earlier projected to drop to 743,000 tonnes from around 853,000 tonnes last year, after an outbreak of mosquito-borne Chikungunya virus in Kerala, which produces 90 percent of India's rubber output.

http://in.reuters.com/article/businessNews/idINIndia-31591520080125?sp=true

 

[Sally Furniss]

Re: Chikungunya affects Indian rubber prices

Fall in Indian rubber output brings import demands

By Biman Mukherji

NEW DELHI (Reuters) - India's tyre and rubber goods firms need 100,000 tonnes of duty-free rubber imports immediately to see them over an anticipated shortfall in domestic production, leading trade officials said on Monday.

Heavy rains in the main growing region of Kerala, which led to leaf fall, and an outbreak of Chikungunya fever among tappers are seen trimming output 4 percent in the year to end-March.

Vipin Jain, chairman of the northern region of the All India Rubber Industries' Association, said firms would have to turn to world markets in a much bigger way than usual.

"A lot of tapping has been affected and the market is short of rubber," Jain said.

"Unless the government allows us to import 100,000 tonnes of rubber duty free immediately, there will be chaos in the Indian market."

Natural rubber production is forecast at 825,000 tonnes this fiscal, down from 853,000 tonnes a year ago, according to industry estimates, at a time when domestic consumption is rising annually by five percent and lower Indian prices are creating some export demand.

Growers say imports would hit domestic producers.

"The domestic prices are much lower than international prices. We don't see why there should be any need for imports," said J.K. Thomas, rubber committee member of the United Planters' Association of India, which clubs growers of cash crops.

The international price of rubber is about 110 rupees per kg, whereas domestic prices are around 95 rupees.

K.G. Mohanan, joint commissioner of the Rubber Board, said there may be a "slight reduction" in output this fiscal but that carryover stocks were sufficient.

Industry officials counter that while supplies with growers and dealers are estimated at 180,000 tonnes, the rubber is not coming into the market in anticipation of rising prices.

Local consumption is likely to reach 860,000 tonnes in the 12 months to end-March. Tyre production accounts for 56 percent of consumption.

India is the world's fourth largest producer of natural rubber, a pack led by Thailand, and imposes a 20 percent import duty on natural rubber, while that on tyres is 10 percent.

It imported about 90,000 tonnes of natural rubber duty-free in 2006/07 against exports of tyres and rubber goods and is likely to buy a similar quantity in 2007/08 under the same rule.

But industry officials said they are seeking 100,000 tonnes of duty-free imports over and above that quantity.

"We feel that there is a production and consumption imbalance," said Rajiv Budhiraja, director general of the All India Tyre Manufacturers' Association.

http://in.reuters.com/article/businessNews/idINIndia-32010820080218?sp=true

 

[Sally Furniss]

Re: Chikungunya affects Indian rubber prices

Slowdown may hurt rubber demand

Domestic prices for rubber have already declined to below international levels and the global financial turmoil could dent rates further

Kochi: India?s production of natural rubber has increased 28% over last year, but traders fear additional supplies and global economic slowdown will squeeze demand.
Domestic prices for rubber have already declined to below international levels and the global financial turmoil could dent rates further, some traders said.

Price concern: Latex being collected. Traders fear rates, already below global levels, will decline further. Bloomberg

In the days ahead, demand as well as exports are likely to fall as vehicle makers are expected to scale down their projections following the economic turbulence, said Rajiv Budhraja, director general of industry lobby group Automotive Tyre Manufacturers? Association.
Tyre makers account for more than 50% of the natural rubber consumption in the country.
In 2007-08, the tyre sector consumed 495,550 tonnes of rubber, or 58% of the total production of 851,455 tonnes, Budhraja said.
Rubber prices had shot up to beyond Rs140 a kg by late August, but declined to as low as Rs113 a kg on Wednesday as supplies increased after the monsoons, according to data from the Rubber Board, a government trade promotion body.
The current price of rubber in the international market is Rs126 per kg.
Production of natural rubber between April and August jumped to 312,500 tonnes from 244,070 tonnes in the same period a year ago, when plantations in Kerala, the top rubber producing state in the country, remained untapped for weeks because of a near-epidemic of chikungunya.
In 2006, rubber production between April and August was 308,660 tonnes.
Rubber exports rose 66% to 16,200 tonnes from April to September and imports dropped to 35,400 tonnes from 39,495 tonnes a year earlier, according to the Rubber Board.
Sajen Peter, chairman of the Rubber Board, said tyre manufacturers would buy rubber from the domestic market at Rs3 a kg less than the international price, so they would be insulated against freight and other costs.
This would also ensure steady intake of rubber produced in the country, Peter added.

http://www.livemint.com/2008/10/02000900/Slowdown-may-hurt-rubber-deman.html

 

[Snowy Owl]

Re: Chikungunya affects Indian rubber prices

Indian rubber output to drop 8 pct from estimate
<hr style="color: rgb(204, 204, 204); background-color: rgb(204, 204, 204);" size="1"> <!-- / icon and title --><!-- message --> Indian rubber output to drop 8 pct from estimate

Mon Aug 13, 2007 6:51PM IST

http://in.reuters.com/article/busine...070813?sp=true

By Mayank Bhardwaj


NEW DELHI (Reuters) - India's rubber output is set to fall more than 8 percent in the year to March 2008 from an earlier estimate, because of a viral disease that has struck workers, the head of a government body said on Monday.


But prices are unlikely to rise because reserve stocks can bridge the shortfall, Sajan Peter, chairman of the Rubber Board, said.


Production is likely to drop to 803,000 tonnes from an earlier estimate of 874,000 tonnes, because of the outbreak of mosquito-borne Chikungunya virus in the southern state of Kerala, which produces 90 percent of India's rubber output.


That will be sharply lower than the 2006/07 output of 853,000 tonnes as the illness, which causes high fever, headache, nausea and muscle and joint pain among workers, has slowed down tapping.


"Production is likely to fall, but I am sure we will be able to keep a lid on prices due to impressive reserves," Peter told Reuters in a telephone interview from Kottayam in Kerala.


"There is no need to worry at all about prices."


Lwer output would put upward pressure on prices. K.T. Thomas, president of the All India Rubber Industries Association, said this month if prices rise too far then locally produced rubber risks losing out to imports.


But Peter, a government official, said there were enough stocks at warehouses from imports in January and February.

"I am not ready to believe that prices will rise due to low output. We had 100,000 tonnes of stocks last month against just 60,000 tonnes in July 2006," he said.


The Rubber Board was set up by the Commerce Ministry for the development of the sector.


Peter said there was no need to ban futures trade, but stricter monitoring of trades would be helpful to quell unhealthy practices.


"Global rubber prices impact Indian trade. I am comfortable if Indian prices do not cross or fall more than 5 percent of international prices," he said.
Indian rubber prices were currently hovering around 88 rupees ($2.2) per kg, while global prices were at around 90 rupees, he said.


"It is an indication that prices will not go up. Besides, we are giving 25 percent subsidy to more than one million growers for replanting trees on 615,000 hectares of land," Peter said.


The government would take steps to raise production as India is likely to become the world's second-biggest consumer after China by 2020, overtaking the United States and Japan, he added.

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